Rescue Plan Pounces On Porsche Formula

The Age

Saturday March 22, 2008

Jez Spinks

British luxury-car maker Jaguar believes it can rekindle its '60s heyday by following Porsche's low-volume, high-profit approach. Jez Spinks reports.

JAGUAR intends to become a copycat by following Porsche's sales strategy of selling fewer cars with higher profit margins.

The British luxury brand has adopted the German sports car maker's successful business formula after years of losses and underperforming sales under American owner Ford.

Jaguar, along with sister company Land Rover, is on the verge of being sold to Indian company Tata, a transition that is unlikely to change plans to abandon the previous (Ford) strategy of chasing big volumes.

At the launch of the XF model in Monaco, Jaguar's design director and senior figurehead Ian Callum says the successor to the S-Type starts a fresh approach for the brand.

"Our aim now as a luxury brand is to aim for about 100,000 units a year, not 200,000 or 300,000," he says. "That's about the right size for Jaguar.

"We look at the Porsche business template as being a very successful one. They do very well on about 100,000 units a year.

"It's all about making 100,000 profitable cars, not half a million slightly profitable cars. That's what the luxury-car business is all about."

Jaguar launched its X-Type sedan in 2001 as Ford took aim at the popular BMW 3-Series segment as a means of increasing the British marque's total yearly sales to an ambitious 200,000.

Jaguar sales peaked above 100,000 in the X-Type's debut year but have continued to slide since, as the car's conservative styling and Ford Mondeo links struggled to attract its younger, brand-savvy target audience. Last year the company sold 60,000 cars, well short of Ford's aspirations for the brand let alone BMW's 1 million-plus sales.

The X-Type remains Jaguar's best-selling model in Australia. An updated version has just been launched locally, but Jaguar Australia expects the more expensive XF to become its most popular model.

"The XF will overtake the X-Type in 2009," says Jaguar Australia spokesman Tim Krieger. "Our strategy is clearly based on selling more XFs than we did with the

X-Type.

A hundred and fifty Australians have pre-ordered an XF and 200 sales are confirmed by the time the model goes on sale here in June.

Jaguar Australia will adopt the British brand's new global strategy

of focusing on profit rather than volume.

"We see the next five years being about 1000 annual sales," says

Mr Krieger. "That's (a figure) where we can be profitable. Last year we sold 800 cars, and some years we might go as high as 1200."

Mr Krieger believes the XF will also help change Australia's perception of the Jaguar brand.

"Australia sees Jaguar as a unique marque, a classic motoring brand, though unfortunately a lot of people see Jaguar being about representing the past.

"One of the things we're doing with XF is showing that modern Jaguar is all about contemporary styling."

The XF is also designed to reduce the average age of Jaguar buyers, which is 58 in Australia. This compares to 43 years for BMW buyers.

The XF is aimed at successful businessmen aged between 40 and 55.

Jaguar says more than three-quarters of Australians inquiring about the XF have never previously owned a Jaguar.

All four XF launch models are coming to Australia in June. Prices start at $105,500 for an XF powered by either a 175 kW V6 petrol (expected to be the volume model) or 152 kW V6 turbo-diesel engine.

A 219 kW naturally aspirated V8 model costs $130,500 and the range-topping XF - equipped with the XKR sports car's 306 kW supercharged V8 - carries a $166,700 price tag.

© 2008 The Age

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